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Feb CPI in line with expectations
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Regional banks rebound
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Meta rises on more layoff plans
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Indexes up: Dow 0.96%, S&P 1.49%, Nasdaq 1.73%
(Updates to market open)
By Shubham Batra and Amruta Khandekar
March 14 (Reuters) - Wall Street's main indexes climbed
on Tuesday after consumer prices in the world's largest economy
rose in line with expectations, bolstering bets of a smaller
interest rate hike by the Federal Reserve at its next meeting.
Data showed that U.S. Consumer Price Index (CPI) rose 0.4%
in February versus 0.5% a month ago. On a yearly basis, it rose
6.0% last month, compared with 6.4% in the previous month.
Excluding the volatile food and energy components, the CPI
increased 0.5% after rising 0.4% in January. In the 12 months
through February, the so-called core CPI gained 5.5% after
advancing 5.6% in January.
Traders held on to bets of a 25-basis-point rate hike at the
Fed's next meeting in March, with odds of a pause in hikes
slipping a bit to 17%. Stocks have been hammered in the past few days following the
collapse of SVB Financial Group and peer Signature Bank and on fears of risks to other banks from sharp
interest rate hikes by the Fed.
Investors are hoping that the threat of a financial crisis
will force the U.S central bank to ease up on monetary
tightening.
"In light of the weekend's events, I don't think it could
have been a more perfect number. It's showing that inflation is
trending the way that the Fed has kind of expected and wanted,"
said Kim Forrest, chief investment officer, Bokeh Capital
Partners, Pittsburgh.
"The Fed's not going to be super aggressive and hurt banks
more by raising interest rates."
Regional bank stocks rebounded after suffering double-digit
losses over the past few days, with the KBW Regional Banking
index up 7.7%.
First Republic Bank jumped 52.7% before trading in
its shares was halted for volatility. Shares of peer Western
Alliance Bancorp were also halted.
The S&P 500 banking index rose 3.9% after recording
its biggest one-day percentage drop since June 2020 in the
previous session.
Meta Platforms Inc rose 5.8% after the
Facebook-parent said it would cut 10,000 jobs in a second round
of mass layoffs.
Other major Big Tech and growth stocks such as Apple , Alphabet Inc and Tesla rose between
1% and 4% in early trade.
At 9:38 a.m. ET, the Dow Jones Industrial Average was
up 305.98 points, or 0.96%, at 32,125.12, the S&P 500 was
up 57.28 points, or 1.49%, at 3,913.04, and the Nasdaq Composite was up 193.90 points, or 1.73%, at 11,382.74.
Shares of ride-hailing companies Uber Technologies Inc and Lyft Inc rose 7% and 8.6% respectively,
after a California state court revived a ballot measure allowing
app-based services to treat drivers as independent contractors
rather than employees.
United Airlines Holdings Inc fell 6.2% after the
U.S. carrier on Monday forecast an unexpected loss in the
current quarter.
Advancing issues outnumbered decliners by a 7.92-to-1 ratio
on the NYSE and by a 4.87-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week highs and no new lows,
while the Nasdaq recorded 9 new highs and 36 new lows.
(Reporting by Shubham Batra and Amruta Khandekar in Bengaluru;
additional reporting by Shashwat Chauhan, Editing by Saumyadeb
Chakrabarty and Uttaresh Venkateshwaran)
